KUALA LUMPUR ⸺ Malaysia’s Malayan Banking Bhd logged higher profits than a year ago in its first-quarter earnings as loan demand picked up and net fund based income rose 7%, the bank said on Thursday.
The largest lender by assets in Malaysia reported a net profit of 2.39 billion ringgit ($577.29 million) in the January-March period versus 2.05 billion ringgit the previous year, beating analysts’ forecast of 1.8 billion ringgit in a Refinitiv poll.
The higher profit was despite revenue dropping by 7.7% to 12.22 billion ringgit.
In a financial statement posted on the stock exchange, Maybank said Islamic banking income rose 16.3%, while net earned insurance premiums grew 30%. Meanwhile, allowances for loan impairment losses and overhead expenses dwindled during the quarter.
Key measure of bank profitability, net interest margin, expanded by 8 basis points to 2.31%.
Loan demand picked up pace as economic outlook improved, with group gross loans up 3.1% compared with 0.3% a year ago, the bank said.
While its Malaysia and Singapore operations saw loan growth, Maybank’s Indonesia operations recorded a decline of 18.3% primarily as a result of write-offs and repayments as it continued to manage its exposure.
Group President and Chief Executive Abdul Farid Alias said the bank remained cautious as loan repayment assistance provided to customers affected by government-imposed movement restrictions to curb the spread of coronavirus infections still camouflaged credit implications for financial institutions.
“Banks need to continue monitoring the situation closely, and provide loan loss provisions that are sufficient to address any unexpected outcome,” he said in a statement.
($1 = 4.1400 ringgit)
Reporting by Liz Lee; Editing by Simon Cameron-Moore; Reuters